Option Value of Disability Insurance in Canada

Kevin Milligan, Tammy Schirle

Chapter in NBER book Social Security Programs and Retirement Around the World: Disability Insurance Programs and Retirement (2016), David A. Wise, editor (p. 137 - 178)
Conference held September 26-28, 2013
Published in January 2016 by University of Chicago Press
© 2016 by the National Bureau of Economic Research
in NBER Book Series - International Social Security

We investigate the importance of the financial incentives for work and retirement embedded in Canada’s public retirement and disability benefit systems. We extend previous research on incentives for retirement by incorporating the structure of incentives in the Canada and Quebec Pension Plan disability benefits, and through careful attention to the impact of self-assessed health status. We find the financial incentives embedded in the public pension system have a significant and substantial effect on the likelihood of entering retirement, but the impact of disability benefits is overshadowed by regular retirement benefits. We also find that the response is driven by those with lower self-assessed health.

This chapter is no longer available for free download, since the book has been published. To obtain a copy, you must buy the book.
Order from

You may be able to access the full text of this document elsewhere.

This paper was revised on April 17, 2014

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.7208/chicago/9780226262604.003.0003

Users who downloaded this chapter also downloaded* these:
Coile Disability Insurance Incentives and the Retirement Decision: Evidence from the United States
Behaghel, Blanchet, and Roger Retirement, Early Retirement, and Disability: Explaining Labor Force Participation after Fifty-Five in France
Banks, Emmerson, and Tetlow Effect of Pensions and Disability Benefits on Retirement in the United Kingdom
Kalwij, de Vos, and Kapteyn Health, Disability Insurance, and Labor Force Exit of Older Workers in the Netherlands
Jürges, Thiel, Bucher-Koenen, Rausch, Schuth, and Börsch-Supan Health, Financial Incentives, and Early Retirement: Microsimulation Evidence for Germany
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us